“TENETS OF THE WARREN BUFFETT”
BUSINESS TENETS
. Is the bussiness simple & understandable ?
. Does the bussiness have constant operating history?
.Does the bussiness have favourable long term prosepects ?
MANAGEMENT TENETS
.Is management rational ?
. Is management candid with its shareholders?
.Does the management resist the institutional imperative?
FINANCIAL TENETS
.Focus on return on equity, not earning per share
.Calculate " owner earning"
. Look for company for high profits margin
. For every dollar ratained , make sure the company has created at least one dollar of market value.
MARKET TENET
.What is the value of business?
. Can the business be purchased at a significant discount from its value ?
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